Most independent advisors, especially those early in their careers, are looking for ways to grow their book of business and increase assets under management. Unfortunately, fewer than half (46%) of advisors agree that they have enough time to grow their business proactively, and some (5%) are not very confident that they can meet their growth goals, according to the Advisor Time Use Study recently conducted by InvestmentNews Research and sponsored by Commonwealth Financial Network.
On average, advisors spend only 15% of their time on business development and 28% of their time in client meetings. Ideally, they say, they’d have another hour or more per week to devote to each of those areas. But they face a host of other obligations competing for their time, including financial planning, administration and executive leadership, investment research, training and development and data input.
“When you look at the points of frustration for advisors in terms of how they’re spending their time, it’s death by a thousand cuts,” says Kenton Shirk, vice president of practice management at Commonwealth.
Business growth largely depends on freeing up time
On average, advisors meet with each of their clients twice a year, for 60 minutes each time. That means advisors who freed up another 76 minutes per week for client meetings could accommodate up to 32 new clients, which could create as much as $217,407 in additional revenue and $50,319 in operating profit, based on industry averages observed in our benchmarking research.
Of course, adding those clients would also require time to prospect for them. The fact remains, however, that time management is the primary obstacle to growth, and overcoming time management challenges can have a huge impact on the bottom line of your practice.
A trusted partner can optimize your efficiency and support your growth strategy
Just as there’s only limited gains to be had from gathering your spare change, there’s only so much time you can free up just by tinkering with your schedule. Many of the advisors surveyed are finding that their time management goals are always just out of reach. That’s when it makes sense to bring in a partner.
A trusted third party can use insights from data analytics to identify areas to improve that would otherwise go unnoticed. By looking at average revenue per person, for example, a partner can help you understand whether you’re under- or overstaffed and identify opportunities to restructure the responsibilities of your personnel. A partner can also help you make data-driven improvements to your service model, shifting which services you’re offering to different segments of your client base.
For many advisors, business development takes them out of their comfort zone. Collaborating with a trusted partner can bring clarity to your growth strategy and give you confidence in your practice’s ability to be more productive. “Our practice management team works one-on-one with advisors and helps them understand where there are opportunities to increase productivity,” Shirk says. “And then we help them figure out what to do about it.”
Outsourcing certain tasks can be another powerful way to free up time to focus on fostering client relationships. Financial management, financial planning, human resources, investment management, marketing, operations and compliance are all functions that advisors could outsource to third parties. The right partner will work with you to help you determine which solutions will yield the greatest advantages for you and your firm. Ideally, this partner will offer these solutions in-house or through vetted third parties to simplify your experience.
Once you’ve identified areas to improve productivity and put a plan in place, it’s essential to establish the patterns of behavior that support your plan consistently over time. “Growth doesn’t happen overnight,” Shirk says. But with ongoing attention and investment — and a little support — you can get there.
Commonwealth Financial Network, Member FINRA/SIPC, a Registered Investment Adviser, provides financial advisors with holistic, integrated solutions that support business evolution, growth acceleration, and operational efficiency. Privately held since 1979, the firm has headquarters in Waltham, Massachusetts, and San Diego, California. Learn more about how Commonwealth partners with more than 2,000 independent financial advisors nationwide by visiting www.commonwealth.com.